The Federal Reserve Bank of New York works to promote sound and well-functioning financial systems and markets through its provision of industry and payment services, advancement of infrastructure reform in key markets and training and educational support to international institutions.

The Outreach and Education function engages, empowers and educates the Second District communities that the Bank serves, especially civic leaders, students, educators, small business owners, policymakers and the general public. It furthers the Bank's commitment to the region by listening to the communities we serve and leveraging our unique attributes to positively impact school and university programs, as well as analysis and research.

What are the Causes of Rising Wage Inequality in the United States?

January 1995Volume 1, Number 1

JEL classification: J31, I21, O33

Authors: John Bound and George Johnson

During the last 15 yearsespecially in the 1980swage inequality rose in the United States. It appears that this can be explained by a secular shift in production functions favoring workers with intellectual rather than manual skills, together with slower growth in the supply of skilled labor than in the previous decade.